New data-visualization tool helps track the world economy

Every company that I examine as a potential venture investment has plans to operate internationally (unless it is the rare case of a start-up that is already international). But start-up founders rarely have the expertise in what “international operations” really means. So, sooner or later I find myself conducting a quick mini-seminar on how interconnected the world economy is today, and the array of issues that a company needs to consider as it expands beyond the borders of a single nation.

GigaOM has an article today that will become a basic portion of that often-conducted mini-seminar. See it here (link) or after the jump.

SUMMARY:Unsure about how the global economy works? GED-VIZ is an interactive graphic that maps how money funnels in and out of different countries.

The global economy can be difficult for the average person to understand. Money funnels towards and away different countries quickly, creating a delicate balance of economic power that can be knocked off its axis by a variety of factors. Nowadays, with a flagging Euro, a still-recovering U.S. and doomsday-style economic reports on China, trying to diagnose the economic health of the world can make one’s head spin.

The Global Economy Dynamics Project (GED), a research institute funded by prominent German non-profit Bertelsmann Foundation, created an interactive data-visualization called GED-VIZ that illustrates the individual economies of countries — as well as their trade interactions with other nations across the globe — over the last 10 years.

Users can select any number of countries for the graphic, which automatically shows a country’s GDP as well as its trade volumes. When a country is highlighted, little strings light up that show the proportional break down of trade — showing thick lines towards places where lots of money goes, and thinner lines for smaller cash flows. The graphic also shows the population of each country year over year, which expands and contracts just like the money within the country.

It’s important to note that GED-VIZ doesn’t include every country on the globe — it specifically focuses on nations that have taken part in important global economic and trade development communities that interact with Europe. For example, every country that is part of the Eurozone (which uses the Euro for currency) or part of the United States’ Organization for Economic Co-operation and Development (OECD) is accounted for. African and Middle Eastern nations don’t have representation here, which could be due to less-transparent economic data, difficult trade regulations or just their lack of trade with Germany.